AdSmart Acquires 2Can Media
CMGI, Andover, Mass., announced yesterday that it has agreed to purchase 2Can Media, an online advertising rep firm based in San Francisco, for an undisclosed amount. 2Can's sales divisions will merge with CMGI subsidiary AdSmart, creating a firm representing 135 sites from five offices across the country. "2Can's view fits exactly with what I was initiating at AdSmart--a site-specific approach," says John Federman, AdSmart CEO and chairman. That site-specific approach means knowing the brands it sells. "I was really shocked in how different the model was [from print publishing], and how little sales reps knew about the products they were selling. They were selling the technology platform and eyeballs but not equity of the brands," says Federman, who was formerly publisher of PCWeek. Federman now requires clients to present to AdSmart reps at least once every six months.
Such knowledge comes in handy when developing lucrative sponsorship agreements--a task proven to be AdSmart's strength. "The sponsorship sales division is going to help a lot," says Neil Monnens, 2Can vp of marketing. Sponsorships provide more affinity between site and advertiser brands, he says. "If they can sell sponsorships on small brands then they'll have a field day with our bigger brands."
As part of the merger, AdSmart gains brands such as Smart Money, Kiplinger and Home & Garden, boosting its banner sales substantially. 2Can, meanwhile, becomes part of a larger firm--gaining more stability and resources. Also, AdSmart's relationship with CMGI firm Engage also helps broaden 2Can's links to technology partners beyond its sole ad management partner, AdForce, Cupertino, Calif. Monnens expects he'll head up a new consulting division meant to help clients make their sites more attractive to advertisers. Ryan Steelberg, 2Can president and CEO, will become president of AdSmart and report to Federman. "Being part of CMGI, our personal upside is diminished but now we have a huge sense of security," Monnens says. Such security is welcome in a market where net stocks and hopes for IPOs can be dashed at any moment, he says. 2Can's management will move to AdSmart's Andover, Mass. headquarters.
"It made more sense to acquire an organization already driven by the same reality as we are," Federman says. "It gives us critical mass more quickly." If the combined entity strengthens the common vision on selling single brands, it is not uncontested. DoubleClick, for example, plans to launch its DoubleClick Select program next month. Monnens and Federman acknowledge the competition, suggesting it validates what they've already been doing.